We shall overcome the financial crunch, says Railway Chairman

New Delhi, Jan 12 (PTI) Railways have been hit harddue to the implementation of Sixth Pay Commission report whichdrained Rs 55,000 crore from its coffers and may take "two tothree" years to absorb the impact, Railway Board ChairmanVivek Sahai said.

"Some method should be found to arrive at a solutionto reduce the impact (on railways) because it happens afterevery pay commission," he said.

He said Railways is the only organisation paying itsemployees from its internal resources, and observed "it takesabout two to three years to absorb the impact".

He also allayed fears about the rising operatingratio, contending that it will come down once the effect ofthe pay commission report dissipates.

The operating ratio is hovering at around 95.3 percent, which implies railways are spending more and earningless.

Sahai also exuded confidence that earning targets forthe current fiscal would be "achieved".

He said after the Fifth Pay Commission wasimplemented, the operating ratio had also gone up 90.5 percent but came down to about 75.9 per cent in 2007-08.

"Railways is a very upright and robust organisationand it will meet the challenge posed by the payments of hugearrears for Sixth Pay Commission recommendation as well as theincreased requirement of pension fund," he told PTI.

He said in 2008-09 railways had to pay 40 per cent ofthe arrears to its employees while implementing pay panelrecommendations which pushed up operating ratio to 90.5 percent. In 2009-10 the operating ratio went up to 95.3 per centbecause 60 per cent of the arrears were paid.

Railways, the largest public-sector employer, has 14lakh employees and 12 lakh pensioners to whom it had to doleout Rs 55,000 crores for implementing the pay commissionreport including Rs 14,500 crores on account of pensionliabilities from its internal resources.

Railways pension liability after 6th pay commission isat Rs 1,500 crore per annum. It also faces the additionalburden of shelling out Rs 1,500 crores to its employees undermodified assured career progression scheme.

Sahai said the extra burden of Rs 1,000 crores onaccount of the hike in diesel prices also impacted theorganisation financially.

"Though these factors were beyond railways control,suitable steps are being taken to improve the earnings andcontrol the expenditures", he said. .

The Railway Board Chairman dismissed apprehensions about the PSU behemoth failing to meet its earning target ofRs 94,765 crore and said loading targets would be achievedbecause of the positive growth in parcel loadings, infoodgrains and fertilisers and enhanced earnings fromadvertising.

Reports had suggested that ban on illegal mining inOrissa and Karnataka, which affected freight loadings, couldhit Railways projected earning figures for the fiscal.

While railways lost 13 million tonnes in iron ore orRs 1,500 crores due a drop in loading in these states, Rs800 crores was also lost on account of shortfall in coalloadings due to the Naxal problem.

Referring to the Gujjar agitation, Sahai said it alsocost the organisation Rs 180 crore.

The suspension of night operation in Maoist affectedareas also added to the woes.